BUX outperforms on local news


The Budapest Stock Exchange's main BUX index finished up 0.54% at 17,350.83 Wednesday, the highest since December 11, after surging 3.22% Tuesday. It is up 4.31% from year-end, after losing 10.40% last year.

While the chance of an agreement to ease Greece's debt service burden versus its international lenders seemed more distant Wednesday than hoped by many on Tuesday, and Western markets stepped on the brake after Tuesday's euforia, the Budapest parquet kept well above the waterline for a third consecutive day.

Confidence was boosted by the strongest indication to date by an official of the National Bank of Hungary (MNB), this time its managing director in charge of monetary policy, that the central bank was biased to a rate cut in the near future.

While German car makers BMW and Mercedes denied Tusday's Hungarian press reports that they wanted to invest or expand in the country, market climate improved after an MTI interview with Hungary's cabinet chief which suggested that, under EU pressure, the government was preparing to scrap the controversial advertisement tax in its present, highly progressive, form, penalising Bertelsmann's RTL Klub tv with a 50% rate, and to replace it with a more equitable flat tax of probably no more than 5% of advertising revenue. The news enhanced speculation that the government might ease other sectoral taxes as well, including the banking tax.

Published today, December annual retail sales figures improved from November, although acceleration again stemmed mainly from fuel sales. Turnover of other items grew much less, but still a bit faster than in the previous month.

Hopes for sustained retail sales growth were supported by an analysis of MNB's revised balance of payment reports which showed the labour income surplus -- that is earnings sent home by Hungarians working abroad minus labour income sent abroad by foreign wage earners in Hungary - rising fast in the last few years, making more than one-third of the current account surplus with money sent home nearing 3% of Hungary's GDP value.

MOL starts to raise fuel prices this week after constant cuts until late January.

OTP won 1.33% to HUF 3,881 on turnover of HUF 4.62 bln from a HUF 8.80 bln session total, almost a fifth above the daily average this year.

MOL rose 1.11% to HUF 11,800 on turnover of HUF 1.75 bln

Magyar Telekom increased 0.55% to HUF 367 on turnover of HUF 623 mln.

Richter retreated 1.36% to HUF 3,845 on turnover of HUF 1.52 bln.

The bourse's mid-cap BUMIX went out 1.70% higher at 1,459.31.

Elsewhere in the region, the WIG 20 in Warsaw was up 0.27%, while Prague's PX rose 0.47%.

Western Europe's major indices were mixed ahead of their close Wednesday, FTSE-100 in London down 0.43%, DAX30 in Frankfurt down 0.11%, and CAC40 in Paris up 0.07%.

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